A credit bureau (also called a Consumer Reporting Agency or CRA) is a company that collects information from various sources about individuals, and aggregates such information into a credit report. Currently, there are three major credit bureaus in the United States including EQUIFAX®, TRANSUNION® and EXPERIAN®.
The credit reports are relied upon by potential and current creditors of the individual, and other authorized entities, when determining whether to take appropriate action regarding the corresponding individual, such as whether to extend credit and under what terms, whether to lease a property, whether to extend an offer of employment, and so forth. Thus, negative items on an individual's credit report can adversely affect the opportunities available to that individual.
Often, a credit score is generated based on the credit report, which allows for a quick and rough approximation of the creditworthiness of the individual. One common credit score used in most applications for credit is called a FICO® SCORE®. FICO and FICO SCORE are registered trademarks of Fair Isaac Corporation. However, there are other scores less commonly used that also rely on credit report items as input, but that are generated via algorithms other than those utilized by FICO.
Credit repair services are offered by a number of organizations for the purpose of helping individuals improve their credit scores, and consequently, the opportunities available to them. Credit repair organizations employ various strategies on behalf of their clients. For example, credit repair organizations may request that credit bureaus demonstrate that an individual's credit report trade lines have been reported fairly and accurately and can be fully substantiated by the associated information providers. For instance, by causing correspondence to be sent to the credit bureaus directly, in the form of an investigative inquiry or perhaps just a dispute regarding a questionable negative item, the credit bureaus may sometimes, but not always, remove that negative item from their credit reports when it is determined that the negative item is either based upon obviously false information, cannot be readily and fully substantiated, or has not been fairly reported in accordance with applicable consumer protection statutes. Alternatively or in addition, by causing correspondence to be sent to a creditor, the creditor might likewise correspond with the credit bureaus causing the negative item to be removed from affected credit reports. As false, unsubstantiated, or unfairly reported negative items are removed or revised, the individual's credit scores tend to improve.